![]() That also means the central bank in particular has access to all data. Now both the central bank and commercial banks think Xi is transacting, when it’s in fact Zhang.Ĭhinese officials thus call the system “controlled anonymity” in as far as all wallet users have to be identified. One easy example could well be that one of these hardware wallets gets stolen or is gifted. The second way this gets out of the commercial banking system, but of course not that of the central bank – which cash doesn’t either – is through these hardware wallets.Į-CNY, “technically enables small amounts of anonymity,” Mu said previously. So the only way official statements that the end user would not be affected is if the public has in effect a bank account with the central bank and the central bank is the custodian, with commercial banks more like WeChat and Alipay, “financial infrastructures.” How? Not your keys, not your coins, with the commercial bank being the custodian. The public currently, except for the pilot participants, can only access bank IoUs in a digital form, but the piloters have central bank money in their wallet, and therefore if the commercial bank goes under, they are unaffected. There are no self-custody apps that anyone can put out there to connect to the system as is the case with bitcoin.Īs commercial banks control the public app, you’d think digital yuan can’t get out of the banking system, but this is digital cash in as far as this is digital reserve money, something that until now the public has not had access to, only cash. Now there’s the potential for a decoupling between the app, which one can consider as the equivalent of a bank account, and the contents of the app which can move in a somewhat peer to peer manner.Ĭommercial banks maintain a key role in as far as they provide to the public access to the app, and they also have the privilege of converting say cash to digital yuan or vice versa. ![]() The likes of WeChat in the analogue system have to interface with commercial banks. “WeChat and Alipay are financial infrastructures and wallets, while digital yuan is the content of the wallet,” said Mu Changchun, director of the Digital Currency Research Institute at the People’s Bank of China late last year. The Arrival of Digital Reserve Moneyĭigital yuan is not a bank account, but M0 reserve fiat legal tender money issued by China’s central bank through a two tier system.Īt the first tier the central bank issues the currency through what some are describing as ‘giant apps’ accessible only by commercial banks participating in what is still a pilot, although the list is constantly being expanding to include Alipay and the like. Generally speaking, you can pass the review within two working days,” a Bank of China staff member said. This is only being tested, but in the future e-cny can be bought at these smart terminals which presumably will also provide other basic services.įor now, “you can apply at business outlets in pilot cities. The Shanghai branch of the Industrial and Commercial Bank of China is trailing a smart terminal for opening a digital yuan wallet. Customers can open hardware wallets or software wallets by opening an account in the terminal. The hardware wallet can be recharged through the soft wallet,” said booth staff of China’s Bank of Communications. “Currently, the hardware wallet is an application linked to the digital yuan soft wallet. That’s both through the usual Near Field Communication (NFC) technology, but also quite interestingly they can handle offline QR code payments. Some of these hardware wallets can process offline payments.
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